Platinum Bullion

Investing in precious metals is a great way to diversify your IRA or personal investment portfolio. Of the three precious metals, platinum is by far the rarest and perhaps most volatile, offering investors unique opportunities.

The Spaniards were the first to use platinum in minted coins in the Spanish-colonized Americas during the early 18th century. Although platinum had been discovered many years prior, the Spaniards lacked the technology to process it. When it was later discovered that platinum alloyed with gold, counterfeiters used it to dilute the amount of gold, the accepted metal of exchange, required in coins. By Spanish royal decree in 1735, all coins containing platinum were confiscated and cast into the sea.

It wasn’t until the 19th century that platinum was used as legitimate currency. The Russians discovered rich veins of platinum in the Ural mountains; in 1828, Czar Nicholas made the decision to mint 3-ruble coins from platinum. That was when platinum made the leap from simple commodity to precious metal. Today, the vast majority of the world’s supply of platinum comes from mines in Russia and South Africa.

What Is Platinum Bullion?

Platinum bullion is a highly desirable investment option that offers buyers a solid commodity that can be held and traded as a hedge against uncertain economic times. Like other precious metals such as gold, silver, and palladium, platinum is a tangible and portable commodity.

Aside from its use in high-end jewelry (just under half of all mined platinum is used by jewelers), platinum is an essential component in many industries. Automobile manufacturers use platinum in autocatalysts, the petroleum industry relies on platinum for the production of high-octane gas, and platinum-based drugs are used in cancer chemotherapy treatments. Platinum is also an essential component in chemical, electrical, and industrial processes.

Platinum’s scarcity makes it uniquely suited for a precious metal investment. Each year, approximately 5 million troy ounces are extracted from mines; in comparison, more than 550 million troy ounces of gold are mined. If platinum mining stopped today, the above-ground resources would supply industrial needs for about a year; the above-ground stores of gold would meet industrial demands for a quarter-century or more. If you combined all the platinum ever mined since the dawn of time, it would fit comfortably in an average American house with plenty of room to spare.

Platinum has an extremely high melting point and is not as malleable as other precious metals. Because of this, relatively few mints produce platinum investment products compared to more popular precious metals like gold and silver. There are only a few dozen mints that fabricate platinum bars, rounds, and coins while there are hundreds that issue gold and silver bullion products. Very few platinum coins and rounds are available for purchase by investors and collectors, which drives up the price of these investments.

Types of Platinum Investments

Platinum bullion investments take two forms: The platinum bar, or ingot, and platinum coin. Platinum coins are government issued and have a face value that is lower than the value of the platinum content. Examples include the American Platinum Eagle and the Canadian Platinum Maple Leaf. China, Switzerland, and France also fabricate platinum coins as does the Perth Mint in Australia and the Isle of Wight. The most popular coin size is one troy ounce, and the mandated purity is 99.95%.

Like platinum coins, platinum bars are 99.95% pure and bear a stamp confirming purity. While other precious metals offer a plethora of shapes and sizes for investment, platinum bars are usually only available in four sizes: 1 gram, 5 gram, 1 ounce, and 10 ounce. If you are investing in platinum bars, experts recommend buying the largest ingot that you can afford in a single purchase. This is because manufacturing costs are virtually identical for large and small bars; therefore, you are paying a lower premium as a percentage of the sale when you buy a large bar as compared to a small one. It is less expensive to buy one 10-ounce bar than it is to purchase 10 one-ounce bars.

PAMP Suisse and Credit Suisse control the majority of the platinum bar investment market; however, other well-respected mints, such as Valcambi Suisse, offer excellent investment choices. International giant Johnson Matthey also manufactures investment-grade platinum bars.

Platinum Prices

Unlike other precious metals, most mined platinum is claimed for essential industrial and jewelry uses. This means that factors such as investment demand, which accounted for less than 3 percent of the platinum market as compared to nearly 20 percent for gold in 2010, had very little effect on platinum spot prices.

Platinum bullion tracks closely with gold bullion in terms of price, and the premium over spot price for platinum bars is similar to that of gold bars. Premiums vary significantly, however, when considering coins as an investment vehicle. While there are dozens of mints that fabricate platinum bars, very few mint coins. This is due to the relative scarcity of platinum and the difficulty of working with the metal. The premium above spot for coins is likely to be much higher than the premium for platinum bars or ingots.

As of January 2015, a one-ounce bar of platinum bullion traded at between $1,320 and $1,380 while a one-ounce platinum American Eagle, if you can find one available for purchase, sells for roughly $1,700 or more depending on year of issue.

Buy Platinum Online

Adding precious metals to your portfolio or self directed IRA has never been easier. At Silver.com, we offer a simple, secure, and completely transparent purchasing process. Our low prices are prominently displayed as are real-time spot prices for all precious metals. We have specialists available who can help you open an account, and transfer or purchase approved investments for your IRA.

Whether you purchase online or via phone transaction, your platinum will be quickly delivered to your doorstep in secure and discreet packaging that doesn’t betray contents. Shipping is free for purchases of $3,000 or more.

If you would like to add platinum to your investment portfolio, shop Silver.com’s extensive selection of platinum bullion today or call us toll-free at 1-888-989-7223 for more information.